The global outbreak of the COVID-19 pandemic has taken global markets by storm and has had a profound impact on the ways we work and live. As governments began to implement measures to protect the health and safety of their citizens, such as travel bans and restrictions in the free movement of people and goods between countries, it was evident that global tourism would be disproportionately affected by the impending crisis.
Greece is widely accepted to have handled the health aspect of the pandemic successfully, but as the country’s economy largely depends on tourism, it will now have to face several direct and indirect consequences of the prolonged crisis. The Greek tourism sector is a key pillar of the national economy, directly accounting for a 11.7% of the country’s Gross Domestic Product, while its indirect contribution is estimated between 25.7% up to 30.9%, while also being a driver for the reduction of unemployment in recent years. Taking into consideration that the Greek tourism sector is overwhelmingly extrovert, with over 90% of tourism revenue coming from abroad, it is safe to assume that the country could suffer a significant blow from the global impact of COVID-19.
Recognizing the significance of tourism for the Greek economy, EY has complied a report that draws upon publicly available information, to provide a clear snapshot of the impact of the pandemic on the sector. Starting from the pandemic’s impact on global travel, our analysis focuses on the economic impact of COVID-19 on Greek tourism, featuring an extensive presentation of the sector’s ecosystem and its contribution to the country’s economic activity and how this is affected by the crisis, as well as a breakdown of the expected competition for international market share in a new, post-COVID-19 environment.
In addition, views and perspectives from industry experts and major stakeholders on the impact of the health crisis on tourism are presented, along with a comprehensive presentation of the European Commission’s guidelines for travel and the measures introduced by the Greek Government for restarting the country’s tourism sector.
EY has also carried out an indicative impact assessment, measuring the impact the pandemic will have on Greece’s tourism, in Gross Value Added (GVA) terms, over a period of two years (Q4 2019 to Q4 2021), under three scenarios – optimistic, baseline and pessimistic. Our analysis concludes that, in contrast to its forecasted ascending pattern prior to the COVID-19 outbreak, Greece’s GVA from tourism is set to significantly decrease in 2020, taking a 41% up to 53% dip during the second quarter of the year (according to our optimistic and pessimistic scenarios, respectively), with base scenario contraction at 49%; however, tourism GVA is set to gradually increase from this point on, and is expected to bounce back to pre-COVID levels at the end of 2022.